U.k. Music Sales Boom Continues

Recession? What recession? The U.K. media may be awash with stories warning of an impending economic meltdown, but the country's music buyers are currently contributing to a boom in consumer spending. That's confirmed by the latest figures from labels body the British Phonographic Industry (BPI), which show a record number of album shipments in second-quarter 2001.

According to the BPI, the U.K. record industry has had "an exceptionally good first half" of 2001. Its newest figures, covering the April to June quarter, show a 14.1% rise in total value of units shipped to £254.6 million ($362 million) at trade prices, despite a slump in singles sales.

Album sales rose 17.9% in value compared with the same period last year, to £227.8 million ($324 million)—in unit terms, a rise of 8.9% to 46.1 million units. That was the highest-ever second-quarter ship-out figure, the BPI says, and it was achieved thanks to a strong release schedule. The body highlights the performances of Shaggy, Travis, Stereophonics, Destiny's Child, and R.E.M. as major contributors to that growth.

Bucking the European Trend

The continuing health of U.K. music sales contrasts with recent experience in Europe's other leading music markets. According to the BPI, music sales in the U.K. grew 3.3% by value during 2000. In Germany—which traditionally has vied with the U.K. for the top European slot in the International Federation of the Phonographic Industry (IFPI) annual market-value rankings—sales were down 1.2% in value in 2000. The same was true in France, while Spain showed a modest 1.8% rise.

Imminent (at press time) first-half 2001 figures for Germany are expected to show sales down around 13% in value, fueling concerns about the impact of CD-R copying on that market. French labels body SNEP, on the other hand, reported a 9.5% rise in value during first-quarter 2001, which is reported to have continued during the second quarter. The most recent official figures for Spain are not yet available.

Keith Jopling, IFPI director of market research, notes that one key reason for the U.K.'s continuing success is that the country has traditionally had a strong retail sector. Specialist multiples such as HMV, Virgin, and Tower have done well recently, he reasons, because "their promotions have been innovative, and the price promotions have been good. If you shop around, you can often find a really good price on recently released product." Even the entry of the supermarkets into the music market—although much criticized by more traditional merchants—has attracted "a new kind of customer," he says, resulting in sales growth in certain sectors.

Jopling reinforces the BPI's point that a U.K. new-release schedule containing "some pretty hot repertoire" also made a substantial contribution to the year's performance. Moreover, he adds that "some of the economic 'wobbles' which have happened elsewhere didn't reach the U.K. [during the first half of the year]." Finally, Jopling observes that the CD-R home-copying culture so evident in other European markets has yet to significantly impact the U.K.

The BPI's optimistic figures for the year to date are backed by leading retailers, notably London-based HMV Europe, which has 126 stores in the U.K., plus six in Ireland and three in Germany. The bedrock of HMV Europe's trade remains the U.K., where it is the largest specialist music retailer.

In the year ended April 28 (Billboard, August 11), HMV Europe's sales grew 17.1% to £654 million ($933 million), and managing director David Pryde says that impressive performance has continued in the U.K. during recent months. A trading update for the 12 weeks ending July 21 showed overall sales at parent HMV Media Group up 14%, compared with the same period in 2000. HMV Europe's sales, Pryde says, are "even better" than that figure.

"We're getting better at what we do," Pryde insists, "and we're opening more stores, so that growth is not surprising." He says HMV will open "a minimum of 13 new stores" in the U.K. and Ireland within the current fiscal year.